The majority of the Derby Board of Aldermen voted Thursday to approve a separation agreement for a tax department employee who allegedly “mishandled” cash payments from tax payers and “manipulated data.”

The employee’s precise actions remain a mystery. The two documents released by City Hall in connection to the city’s internal “investigation” into the matter do not provide a comprehensive account.

But, after Thursday’s vote, Katherine Kulhawik, who was escorted out of Derby City Hall June 25, will be allowed to resign, she will not file a union grievance against Derby and will the city will not give her benefits — assuming she signs the document the Board of Aldermen approved.

The Valley Indy spoke briefly with Kulhawik after the Aldermen meeting at a restaurant in downtown Derby Thursday night but she declined to comment.

“No thank you, I’m good,” she said.

The separation agreement was not released Thursday after the Aldermen approved it. City officials said they would release the document Friday — if it gets signed.

Aldermen Art Gerckens and Barbara DeGennaro voted against the agreement. Click the video to hear Gerckens talk about it.

According to a letter from Derby Corporation Counsel Joseph Coppola, the city started an investigation June 25 after Kulhawik was accused of “mishandling cash, the intention of deletion of data regarding cash payments of cash and the suspension of tax billing statement.”

“The results of the investigation indicate that you participated in the missapplication of payments and data manipulation or fraud,” Coppola’s letter read.

City officials never filed a criminal complaint in connection to their allegations.

According to a letter from Derby Tax Collector Denise Cesaroni, Kulhawik’s problems arose June 19, after a Derby taxpayer called the tax collector’s office to request that the city fax a document to the Department of Motor Vehicles stating she was up-to-date with her Derby taxes.

People who owe taxes are not permitted to register their motor vehicles unless they pay their tax bill.

The woman had a tax clearance letter from the Derby tax collector’s office indicating she was current with her taxes, but officials at the DMV thought “the signature looked suspicious,” according to Cesaroni.

Cesaroni then reviewed the woman’s account.

City Hall records indicated the woman still owed back taxes.

However, the resident said not only had she paid her taxes in cash — she had a receipt from Derby to prove it. The taxpayer faxed her receipt, along with the tax clearance document, to Cesaroni.

Cesaroni checked computer records which showed the woman’s cash payment had been voided.

This raised a red flag with Cesaroni.

“Normally, a transaction is voided when it is entered with incorrect information or belongs on another account,” Cesaroni wrote in the letter.

Employees of the Derby Tax Collector’s Office then searched the trash to see if they could find the cash or a paper slip connected to the cash.

Neither was located. The dollar amount involved was not specified.

Cesaroni then checked other voided payments.

“I discovered that there were several accounts whose CASH payments were deleted and not re-entered. This never happened with CHECK payments,” Cesaroni wrote.
Kulhawik was suspended without pay as of June 25.

However, the letter from Cesaroni — and the subsequent letter from Coppola — did not describe the extent of the alleged problem, nor did it directly connect Kulhawik to the “pattern of voids.”